Northern Metropolis project hinges on tech, bidding reforms

Fragmented, undeveloped private land creates hurdles for site formation.

Hong Kong’s Northern Metropolis development faces critical tests on construction methods and land-tender rules, analysts said, as the city seeks to accelerate housing delivery and industrial growth.

Jack Tong, director of research and consultancy at Savills (Hong Kong) Ltd., said modular construction technologies are central to cost control and efficiency. The shift to modular integrated construction reduced building time by 30% on a Tung Chung public housing project, he told Hong Kong Business.

“The shift to a dual-envelope tender system is also critical, as it evaluates bids based on their economic and industrial contribution to the Metropolis to ensure private development aligns with the initiative’s goals,” he added.

Hong Kong Chief Executive John Lee, in his 2025 policy address in September, announced the establishment of a committee for the development of the Northern Metropolis to streamline approvals and signal government commitment to the project.

Tong said governance reforms—placing the project under direct supervision of the Chief Executive—have improved approval speed and market confidence.

“The most important organisational change has been the upgrade of the governing structure… which guarantees the project’s priority,” he said via Zoom.

The project faces hurdles from private land ownership, with almost half of its 3,700 hectares comprising fragmented, undeveloped plots, he said. “This creates major hurdles for land resumption and site formation.”

Infrastructure timing also poses challenges, as critical transport links, including the Northern Spur Line, are not expected until 2032–2034, years after some housing is slated for completion.

Budget constraints mean the government can’t fund the development alone, he added. 

“Public-private cooperation is crucial,” Tong said, citing measures like instalment payment of land premiums and the large partner scheme, which gives developers discounted development rights in exchange for building infrastructure.

“These measures, alongside the shift in tender focus, aim to draw mid-sized developers and promote collaboration with innovation-driven industries,” he pointed out.

Mark Cooper, senior director of thought leadership for Asia-Pacific at the Urban Land Institute, said timely delivery matters, but sustainability and integration remain paramount.

“The overall 10-year housing target is highly dependent on the Northern Metropolis, but the recent payment of substantial land premiums by major developers suggests private sector willingness to cooperate is improving,” he said in an emailed reply to questions.

Tong said success rests on balancing efficiency, market participation, and innovation to ensure the Northern Metropolis meets both housing and economic objectives.